Harare - The re-opening and privatisation of the majority of the Zimbabwe Mining Development Corporation (ZMDC) mines as part of the government measures to transform the mining sector is set to increase the country’s export earnings.
In simple terms, privatization is a term that describes the process by which a property or business goes from being owned by the government to being privately owned. It generally helps governments save money and increase efficiency.
Privatization of specific government operations happens in a number of way, although generally, the government transfers ownership of specific facilities or business processes to a private, for-profit company.
Advocates of privatizing government operations believe that private companies operating with a profit motive can deliver goods and services more efficiently than government agencies that may be bogged down by bureaucracy.
Opponents of this type of privatization often argue that services considered basic necessities, such as water, electricity and education should not be subject to market forces or the drive to generate a profit. In some places, nonessential operations such as liquor stores are controlled by the public sector as a way to increase revenue for the state.
In Zimbabwe, most government owned mines such as Elvington and Gaths gold mines, as well as asbestos miner Shabanie and Mashaba, were major foreign currency earners and employment generators before their operations were mothballed by a variety of debilitating economic factors.
Those mines are still operating but at a loss, thus bleeding the country’s fiscus.
Finance and Economic Development Minister, Prof Mthuli Ncube said the Government will in the next 18 months facilitate joint ventures with willing partners as part of the parastatal reforms especially on loss makers but will give a new lease of life to others which have a huge potential to recover.
These measures are contained in the budget presented by the Treasury boss.
Other mines set for joint ventures include Jena, Sabi, Golden Kopje, Sandawana and former copper mining giant Mhangura Mine in Mashonaland West.
However, one important disadvantage to recognize is the opportunities for bribery and corruption that come with privatization. Typically, private companies are less transparent than government offices, and this reduced transparency paired with a drive for profit can be a breeding ground for corruption.
Equity Axis News
